Daily Accommodation Payment guide

Considering an aged care residency for yourself or a loved one? Understanding the financial commitment is crucial. The daily accommodation payment (DAP) is one way of funding your stay at an aged care home. We'll break down what the DAP is and what your other payment options are when moving into aged care. With clear information, you can navigate the financial landscape of aged care with confidence.

What is the daily accommodation fee?

In aged care, the daily accommodation fee is your contribution toward the cost of your room. Like rent, you're contributing to the upkeep and services specific to your room within the home.

Here’s how it works:

1. 1. Your aged care home sets a price: Each home establishes a price for their accommodation, considering factors like room size, location and amenities. This price represents the total cost of staying in that specific room.
2. 2. You choose how to pay: You have the flexibility to choose how you'd like to pay for your accommodation. This usually involves a deposit and/or regular payments.
3.  

Understanding aged care daily accommodation payments

You can pay for your aged care accommodation through a refundable lump sum, daily payments or both.

The DAP is one way to pay, but it can be difficult to get the full picture on its own. Here, we show the DAP as an option amid other aged care accommodation payment methods.

Refundable lump sum

This is like a deposit on your room. You can pay the full price (refundable accommodation deposit or RAD) or a portion of the price (refundable accommodation contribution or RAC), with the government contributing the rest. The money you pay is refunded to you or your estate when you leave the aged care home — minus what was used to cover your aged care costs.

Daily payments

These are like rent payments and are not refunded when you leave. You can either pay the total daily amount yourself (DAP) or have the government contribute part of it (daily accommodation contribution or DAC) based on your income and assets.

Combination

You can choose to combine a refundable lump sum with daily payments. This lets you spread out the cost or use some money upfront to lower your daily payments.

How are daily accommodation payments calculated?

If you choose to pay for your accommodation by DAP, the amount is worked out by applying the maximum permissible interest rate (MPIR; a government-set interest rate used to calculate a daily accommodation payment based on your agreed room price) to your agreed room price and dividing the amount by 365.

Let's say the current MPIR is 4.5% (This is just an example — the actual MPIR may be higher or lower). Here's how to calculate the daily payment based on a $550,000 accommodation fee:

1. 1. Convert the MPIR into a decimal: MPIR (4.5%) / 100 = 0.045
2. 2. Apply the formula: DAP = (Room price x MPIR) / 365
3. 3. Plug in the values: DAP = ($550,000 x 0.045) / 365
4. 4. Calculate: DAP ≈ $760.82

Aged care daily accommodation payment at Estia Health

Whichever way you decide to pay, Estia Health is always here to help. We strongly suggest that you get independent financial advice before beginning this process so that you are fully aware of all of your assets and comfort in proceeding. You can also visit My Aged Care for financial advice.

To learn more about the different fees aged care residents must pay, visit our page on aged care costs.

If you are interested in finding out more about our homes or staying with us in respite care or long-term care, please contact us on 1300 682 83.